Regulatory T (Treg) cells suppress allograft rejection and are critical for peripheral tolerance. Despite the extensive studies on Treg cells and allograft survival in animal models, adoptive transfer of Treg cells alone remains ineffective in inducing long-term allograft survival or tolerance in normal wild-type (WT) animals, because only a small fraction of systemically administered Treg cells can reach an allograft. Moreover, the limited life span of transferred Treg cells also likely restrains their suppression. These problems may have severely hampered the progress in clinical trial using Treg cell therapies for suppressing allograft rejection or autoimmune diseases. This proposal will focus on optimizing Treg suppression of islet allograft rejection using novel approaches, and understanding the mechanisms of their action. We have developed a system in which donor islets are activated and incubated with CD4+CD25+ Treg cells, resulting in intra-islet recruitment of Tregs before transplantation. We found that Treg-preoccupied islet allografts survived much longer than empty islets. In addition, intra-hepatic islet transplantation in the system resulted in even longer survival than that under kidney capsule or via the portal vein. We for the first time have selected the hepatic parenchyma as a grafting site based on the facts that the liver is an immune privileged site but that islets infused via the portal vein are subject to instant blood-mediated inflammatory reaction (IBMIR). Hence, transplanting Treg-preoccupied islets in the hepatic parenchyma is a novel and practical approach to prolonging islet allograft survival by optimizing Treg suppression. We then propose to investigate whether islet allografts that are preoccupied with apoptosis-resistant Treg cells or Treg- preoccupied islet allografts that over-express IDO survive long term in the liver, whether modifying MAPK and STAT signaling pathways in Treg cells enhances their suppression, and whether Treg-preoccupied islet allografts also survive long-term in diabetic NOD mice in the presence of mild immunosuppression. We also propose to further study the mechanisms underlying the enhanced Treg suppression in the hepatic parenchyma. In this study, a unique model of intra-hepatic islet transplantation in both chemical-induced diabetic WT and NOD mice will be implemented. Apoptosis-resistant Treg cells and islets over-expressing IDO will also be utilized to maximize Treg suppression. Moreover, MAPK and STAT signaling pathways will be modified to enhance Treg function. Taken together, this study is to localize transferred Treg cells to islet allografts and promote the survival, expansion, and/or function of Treg cells so that they can optimally exert suppression. This proposal reveals a novel approach to inducing long-term islet allograft survival and may help design a clinical protocol to promote islet allograft acceptance in patients with type 1 diabetes.